With mortgage interest rates reaching record lows in the past year, many homeowners are debating whether or not to Refinance Carson City. If you’ve paid off 5% or more of the equity of your home, it’s usually possible for you to get a new lender and Refinance Carson City. But will it make financial sense for you? Keep reading to learn about 3 situations where it can benefit you to refinance your home.
You Can Get a Better Interest Rate
Currently, interest rates are dropping, and that can make it tempting to refinance your home. If your credit is up to par, you can often negotiate an interest rate that’s at least 1% lower than what you’re currently paying. A 1% drop is usually enough to both cover the cost of hefty refinancing fees and save you a significant amount of money on mortgage payments in the long run. However, if you aren’t eligible for a decrease of at least 1%, you’ll probably just break even.
You’ve Raised Your Credit Score
If your credit wasn’t perfect when you applied for your first mortgage loan, refinancing can be a smart move if you’ve improved your score significantly since then. Interest rates are dramatically lower for those with excellent credit scores. A FICA score increase of 100 points can change your rates drastically. Get a copy of your credit report, and talk to a financial lender to get a ballpark figure of how much you can expect your rates to improve. You may be pleasantly surprised.
You Have More Disposable Income
If your finances have recently improved, you can save a lot of money in the long run by refinancing your mortgage. Switching lenders and choosing a 15-year mortgage over the typical 30-year mortgage will increase your monthly payment but drastically reduce the interest you’ll pay. Using your extra money to cover the increased payments will pay your loan off faster and save you a bundle on interest rates.
It can be difficult for homeowners to decide whether or not it’s a good time for them to Refinance Carson City. If you’re circumstances match any of the scenarios discussed above, there’s a good chance it could be financially beneficial to you.
